Musa Lwanga (standing), a Research Analyst with EPRC and lead researcher for the ongoing study makes a presentation during a consultative workshop at EPRC. Photo by Mouris Opolot
The Economic Policy Research Centre (EPRC) is conducting a study to identify and explore strategies for boosting domestic revenue mobilization following increasing financial demands vis a vis low revenue collections.
To gather stakeholder perspectives, the center organized a consultative meeting with the academia, private sector, line government institutions, civil society and Local Government on 5 July 2017, to brainstorm on what Uganda should do differently to boost domestic revenue mobilization.
While opening the consultative workshop, Ibrahim Kasirye, the Principal Research Fellow, EPRC, noted that Uganda’s revenue collection to GDP stands at 13 percent, which is low compared to other sub Saharan countries such as Kenya whose revenue collection to GDP is 20 percent.
In his presentation, Musa Lwanga, a Research Analyst with EPRC and lead researcher for the ongoing study observed that Uganda should be collecting about 16 percent revenue to GDP-the sub Saharan average, but the country is stuck at 11-13 percent.
Lwanga attributed the low collections to illicit financial outflows and tax evasion, perpetrated by mostly multinationals. He also noted that over the years, there has been a decline in capital flight, however the trade misinvoicing to GDP has been increasing to the detriment of the economy.
Other factors highlighted by Lwanga include the informality of firms for example the percentage of unregistered firms rose from 73 percent in 2006 to 95 percent in 2013 in comparison to Tanzania’s 73 percent in 2013 and Kenya’s 69 percent.
Likewise Moses Bekabye, the Macroeconomic Advisor at Ministry of Finance Planning and Economic Development pointed out the selective issuance of tax holidays majorly to foreign investors as a major contributor to dwindling domestic revenue collections.
In a bid to aver aforementioned challenges, participants called for restructuring of several strategies and initiatives for example legislations and administration, tax systems, digitization to increase domestic revenues.